Archive for February, 2012

On behalf of Cockatoo members in Canerra ACT, we provided the following views to NRMA, the motoring group for NSW/ACT.

Ms. Wendy Machin
President, NRMA

Dear Wendy

Could you please pass on our thanks to NRMA Board member Alan Evans for drawing attention to ACT petrol prices on the radio today. His call for the introduction of independent retailers is so valid.

Three weeks ago we’d noticed the 10c/litre gap between Canberra and other major centres, and rang Simon Corbell’s office to ask about some price surveillance. An adviser said it was pointless and that the petrol market was operating competitively.

As the economic centre of the world shifts to the East, so is the centre of high performance in school education. Four of the world’s five highest-performing systems are Hong Kong, Korea, Shanghai and Singapore, according to OECD’s 2009 PISA assessments of students. InShanghai, the average 15-year old mathematics student is performing at a level two to three years above his or her counterpart in Australia, the USA and Europe

In recent years, many OECD countries have substantially increased education expenditure, often with disappointing results. Grattan Institute’s new report from its School Education program, Catching up: learning from the best school systems in East Asia, shows how studying the strengths of these systems can improve our children’s lives.

Success in these systems is not determined by culture – by Confucianism, rote learning, Tiger Mothers etc. – nor is it always the result of spending more money. Instead, these systems focus on what is known to matter in the classroom – a relentless, practical focus on learning, the creation of a strong culture of teacher education, collaboration, mentoring, feedback and sustained professional development.

Many western countries have begun to introduce versions of the reforms that these East Asian systems have implemented, or are talking about doing so. Most have much further to go. This report provides an extensive assessment of how other countries can implement the lessons of these high-performing systems.

Professor Roy Green (UTS, Sydney) does a great job keeping his friends updated with the latest policy papers. He has steered us to a very recent U.S. Department of Commerce document (joint with the National Economic Council) which explains the industry policy direction of the US Government. However the document is quite simplistic and uninspiring. Perhaps its target audience is middle America (with which we have no quarrel), but one might have expected it to emphasise global supply chains, bilateral deals with emerging developing economies, and a tax system more attuned to the 21st century. You be the judge – full document is on the web.

The key points are paraphrased as follows.

The U.S.economy reigned supreme in the 20th century – world’s largest, most productive, and most competitive. As the 21st century approached, alarms sounded – incomes stagnated and job growth slowed. Other countries became better educated and our manufacturing sector lost ground to foreign competitors.

The scientific and technological building blocks critical to our economic leadership have been eroding – elements of the U.S.economy are losing their competitive edge.

Innovation is the key driver of competitiveness, wage and job growth, and long-term economic growth. Therefore, need to look to the past and examine the factors that helped unleash the tremendous innovative potential of the private sector. Among these factors, three pillars have been key:

– Federally supported research laid the groundwork for the integrated circuit and the subsequent computer industry; the Internet; and advances in chemicals, agriculture and medical science.

– The U.S. educational system in the 20th century produced increasing numbers of high school and college graduates, more so than anywhere else in the world. They boosted innovation.

– The transformation of infrastructure in the 20th century was amazing – the country became electrified, clean water became widely available, air transport became ubiquitous, and the interstate highway system was constructed. These developments helped businesses compete by opening up markets and keeping costs low.

The need for the Federal government to play an important role in research derives from the fact that there is a divergence between the private and social returns of research activities which leads to less innovative activity in the private sector than is what is best for our country. However, government support of basic research can remedy this problem.

To improve the trajectory of American innovation, thoughtful, decisive, and targeted actions are needed i.e. sustaining the levels of federal funding for basic research, extending a tax credit for private‐sector R&D to give companies appropriate and welldesigned incentives to boost innovation, and improving the methods by which basic research is transferred from the lab into commercial products.

Education – the second pillar – is also critical to foster innovation and to increase living standards. The advances in education in the 20th century helped propel the economic rise of the United States. However, the education system has slipped – poor preparation in math and science and the high cost of college tuition and expenses are restricting the flow of American science, technology, engineering and mathematics (STEM) graduates from our universities.

In the past, the US has led the way in several key areas of infrastructure development (the third pillar). Today theUS is lagging behind in broadband Internet access and wireless communications.

A crucial component of theUnited States’ future competitive strength is a flourishing manufacturing sector. Manufacturing creates high-paying jobs, provides the bulk of U.S.exports, and spurs innovation. Manufacturing’s share of GDP and the number of workers in manufacturing has fallen, while the trade balance in manufactured goods has worsened. The Federal government has historically played an important role in providing a level playing field and must do so with renewed vigour.

Increasing the competitiveness and the capacity to innovate goes beyond improving research, education, infrastructure and manufacturing. There are many other policies that ensure the private sector has the best possible environment for innovation and competitiveness – including incentives to form regional clusters, promotion of exports and access to foreign markets, the level and structure of corporate taxes, and an effective IP regime (domestically and abroad). The Federal government has an important role to play here.

The United States has a strong base on which to rise to the challenges. There are clear actions that can help this nation regain its innovative and competitive footing. To succeed, we must have the will to implement and to sustain the policies that will prepare theUnited Statesto continue to be an economic leader in the 21st century.